Vermont Public Utility Commission Approves Blended Residential Rate Calculation Update

The Vermont Public Utility Commission ("Commission") has adopted a proposal for decision regarding the blended residential rate calculation, as filed by Vermont Electric Cooperative Inc. ("VEC"). The proposal aims to update the blended rate calculation, which is critical for determining the value of bill credits generated by net-metering systems. The Commission's decision comes after an investigation into the tariff, which included comments from the Department of Public Service and VEC. The Commission has approved VEC's tariff as filed, with a blended residential rate increase of approximately 1.72%.

Key Takeaways:

• The Vermont Public Utility Commission has approved Vermont Electric Cooperative Inc.'s tariff, which includes an updated blended residential rate calculation.
• The blended residential rate calculation is based on Rule 5.127(a)(2), which requires utilities to calculate the blended rate by adding together revenues from kWh sold under inclining block rates and dividing the sum by the total kWh sold by the company at those rates.
• The Commission has concluded that Rule 5.127(a)(2) governs the calculation of the blended residential rate when a utility files a proposed general rate increase, rather than Section 226 of the Vermont Statutes.
• The approved tariff takes effect July 1, 2023, with the blended residential rate increase of approximately 1.72% applied on a service-rendered basis.
• The Commission's decision acknowledges the potential administrative burden of adjusting customer accounts to reflect the new blended rate calculation, but recommends that utilities use the methodology set forth in Rule 5.127(a)(2) moving forward.
• The Commission has also recognized the inconsistency in its previous orders approving revised net-metering tariffs, where the Commission allowed increases to the blended residential rate in the same percentage as the utility's general rate increase.

Statistics:

• Blended residential rate increase: approximately 1.72% ( Tiles 10.24%)
• Date of tariff update: July 1, 2023
• Number of comments filed: 2 (1 from the Department of Public Service and 1 from VEC)
• Number of parties involved: 2 (VEC and the Department of Public Service)
• Timeframe for adjusted customer accounts: 15 days from the effective date of the new tariff
• Frequency of blended residential rate calculation updates: every even-number year as part of the biennial review process

Sources:

• Vermont Public Utility Commission's Proposal for Decision, Case No. 23-1682-TF
• Vermont Electric Cooperative Inc.'s Tariff filing, dated May 18, 2023
• Department of Public Service's letter recommending approval of the tariff, filed June 19, 2023
• Hearing Officer's Report, dated September 12, 2023